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Abstract:
This paper evaluates the possible consequences of the forthcoming European and Monetary Union on wage behaviour. It is shown that EMU does not influence wage policy directly, but rather indirectly through its implications on other areas of economic policy, predominantly on monetary policy. Consequently, EMU will put increasing pressure on using wage policy as a flexible adjustment variable, since other adjustment mechanisms shall cease to exist. Six European countries were analysed empirically, which showed that in the past, southern European countries conducted a much more expansive wage policy than northern European countries. However, this competitive disadvantage of the southern countries was more than compensated by exchange rate developments. What will happen when EMU has come into effect? Either fewer devaluation possibilities within EMU will lead to a shift in competitive positions in favour of the northern countries, or a change in wage behaviour will be observed. The descriptive analysis shows that, on the eve of EMU, wage policy has become more moderate. This trend could be accelerated by the arrival of EMU. The econometric analysis provides an argument for this: the stability of exchange rates have been proven to have a dampening effect on wage increases in the past, particularly in southern European countries. Whether the extent of these effects will be sufficient to prevent a shift in relative competitive positions, however, remains to be seen.

Abstract:
This paper analyses the extent to which gender differences in human capital contribute to explaining the observable wage differential in favour of men and its reduction since the mid-eighties among West German full-time employees in the private sector. Based on a simple analytical framework, the analysis shows that if a large part of the gender wage gap can be attributed to women's relative deficit with respect to human capital endowment, an equally large part stems from the fact that female human capital is less valued in terms of wages. The gender wage gap narrowing stems mainly from a reduction in gender inequality with respect to the returns to human capital in terms of wage which favours women. Nevertheless, women improved their relative position regarding human capital endowment, but the overall lower valuation of human capital by the labour market reduces the benefit of this relative improvement. The roles of the educational attainment, labour market experience and occupational factors were analysed specifically. The level of educational attainment explains a large part of the gender wage gap, mainly because women have a lower educational attainment than men, but also because similar qualification levels yield lower returns for women. Taken alone, the developments related to education would have increased the gender wage gap significantly. This is because, if women did catch up in terms of educational attainment, the effect of this educational expansion was more than compensated by the fact that the returns to education dropped particularly markedly for women. Changes related to labour market experience have a neutral influence on the gender wage gap. Women improved their relative position concerning their work experience, but lose their advantage in the returns to work experience. Part of the gender wage gap is attributable to occupational segregation, i.e., female crowding into lower paid occupations. The extent of occupational segregation has remained fairly stable, but the wage penalty for working in typically female jobs has increased over time.

Abstract:
This paper analyses the link between educational attainment and unemployment risk in a French-German comparison, based on a discrete time competing risks hazard rate model applied to comparable microdata sets. The unemployment risk is broken down into the risk of entering unemployment and the risk, once unemployed, of not getting reemployed. The paper examines the impact of education on both risk components. France faces a higher unemployment rate than West Germany, due to a higher risk of entering unemployment whereas the risk, when unemployed, of not getting reemployed is lower than in Germany. The risk of entering unemployment is particularly high for French employees with poor education, but higher education graduates face a higher risk of getting unemployed in Germany than in France. Concerning the reemployment prospects of the unemployed, they
are better in France than in West Germany at all education levels, but particularly for the unemployed with a low education level. The effect of education on both risk components does not differ significantly across genders, all else equal.

Education, unemployment, hazard rate model

Abstract:
In this paper, we analyse the intergenerational transmission of poverty from Polish parents to their children through children's educational attainment during the transition process of the 1990s. The relationship between family background and education is investigated using an ordered probit model of educational attainment with data from the Polish Labour Force Survey. The results show that children's education is strongly related to household structure, parents' education, city size, and region of residence. Household income and the parents' labour market situation have only a weak, though significant, effect on children's education. We conclude that, if poverty transmission takes place between generations, this seems to be primarily caused by the inheritance of human capital rather than by pure wealth effects.

Educational Decisions, Transition

Abstract:
This paper analyses the determinants of participation in higher education in West Germany. In particular, the role of social origin as well as of expectations regarding the labour market outcome of a higher education degree and of public educational policy are examined. The estimations are based on a model of utility maximisation, where the decision to enrol in one of several educational tracks of different levels is determined by the expected ratio of marginal cost to marginal return for the different enrolment alternatives given some observed characteristics. The model is estimated empirically on the basis of GSOEP and regional data. The results show that the probability of enrolment in higher education is mainly influenced by social origin. Parental education and occupational position, in particular, are essential. However, the enrolment probability also depends on labour market return expectations. In particular, the absolute level of the personal unemployment risk, rather than the reduction of the unemployment risk to be expected from higher education, is a strong incentive to pursue higher education. The expected return to education in terms of wages also affects educational decisions significantly. A higher propensity to be out of work or employed part-time proved to go along with a lower probability of being enrolled in higher education significantly. Also public policy is found to have an influence on enrolments. In particular, extending the coverage of public financial support in the form of BAfOG seems to be more efficient in increasing enrolments than increasing the amount of BAföG granted. The extent of the repayable part of the financial aid has a dampening, though limited, influence on enrolments.

educational decisions, costs of education, returns to education

Abstract:
This paper analyses the relationship between education, gender and earnings in France and Germany. The model chosen here enables one to estimate the impact of education not only on the expected earnings level but also on their dispersion, taking gender-specific sample selectivity into account. The results indicate that the completion of a minimum level of general instruction yields an earnings premium that cannot be compensated by a vocational degree. Moreover, education affects the uncertainty of earnings. General qualifications are found to increase the earnings risk, vocational ones to reduce it. More education, especially tertiary education, yields a high earnings premium but is associated with the highest earnings uncertainty. Women enjoy a higher earnings premium for education than men and though they face overall a higher earnings uncertainty, they can - more than men - reduce this risk by investing in their education.

Education, earnings, heteroscedasticity

Abstract:
This paper analyses the impact of family background, gender and cohort on educational attainment in France and Germany, relying on a theoretical model imbedded in the human capital theory. In a second step, the educational process is decomposed into school and post-school achievement. The same conceptual framework applies at both stages, but a correlation is permitted between them. Empirically, this boils down to estimating a multivariate ordered probit model. The results show that in spite of huge differences in the distribution of education in France and Germany, these countries prove surprisingly similar with respect to the impact of family background and cohorts. However, there are significant dissimilarities depending on the stage observed in the educational career, in particular with respect to gender differences.

Educational attainment, Multivariate ordered probit

Abstract:
This paper aims at formulating a theoretical model of educational attainment which is directly implementable empirically. The conceptual framework relies on the human capital theory, where individuals weigh the costs and the returns of education to decide on the optimal amount of education they want to invest in. In an extension of the model, the educational process is decomposed into two stages: achievement at school and post-school achievement. The same conceptual framework applies at both stages, but a correlation is permitted between them. Empirically, this boils down to estimate a multivariate ordered probit model. An illustration based on German data shows how this model functions in practice. Thus, the model confers an economic foundation on the empirical estimation of the impact of certain factors on educational outcomes.

Education, Economic modelling, Multivariate ordered probit

Abstract:
We exploit the cross-country and time variation in the demographics and education structure in 11 European countries to study how cohort size has affected real earnings in Europe. When we pool the data of all countries, we find that cohort size has a negative and statistically significant effect on the earnings of the older cohorts - aged between 35 and 54 - but no statistically significant effect on the earnings of younger cohorts - aged 20 to 34. The negative effect of cohort size on earnings is completely driven by Southern European countries, a result which we relate to institutional differences. While the share of individuals aged 20 to 34 in the population has declined in the EU11 by 10.20 percent between 1991 and 2001, the share of individuals aged 35 and 54 has increased by 9.32 percent. Our estimates suggest that, as a consequence of these significant demographic changes, the real earnings of the younger cohorts have increased on average by a tiny 0.06 percent, while the earnings of the older cohorts have declined by 0.93 percent, a modest variation.

cohort size, wages, Europe

Abstract:
We analyse the relationship between family background and children's educational attainment in the 1990s in Poland. If parental poverty affects children's educational prospects, the increase in social inequalities observed in the Polish transition process will be transmitted between generations. We apply an ordered probit model of educational attainment on longitudinal data from the Polish Labour Force Survey. Surprisingly, parents' income and their labour market status have only a weak impact on children's education. Parents' schooling, however, is strongly related to children's, and so are household structure, city size, and region of residence. We conclude that, if transmission of inequality takes place between generations, this seems to be primarily caused by the inheritance of human capital rather than by pure wealth effects.

Abstract:
We exploit the cross-country and time variation in the demographics and education structure of 11 European countries to study how cohort size has affected real earnings in Europe. When we pool the data of all countries, we find that cohort size has a negative and statistically significant effect on the earnings of the older cohorts - aged between 35 and 54 - but no statistically significant effect on the earnings of younger cohorts - aged 20 to 34. The negative effect of cohort size on earnings is completely driven by Southern European countries, a result which we relate to institutional differences. While the share of 20 - 34-year-olds in the population has declined in the EU11 by 10.20 percent between 1991 and 2001, the share of 35 - 54-year-olds has increased by 9.32 percent. Our estimates suggest that, as a consequence of these significant demographic changes, the real earnings of the younger cohorts have increased on average by a tiny 0.06 percent, while the earnings of the older cohorts have declined by 0.93 percent, a modest variation.

Cohort size, wages, Europe

Abstract:
The present report summarises the outcome of a research project carried out jointly by researchers of the Polish Center for Social and Economic Research Foundation (CASE) and the German Centre for European Economic Research (ZEW) and funded by the Volkswagen foundation. The objective of this project is to analyse the mechanisms at work in the rise and persistence of poverty during transition in Poland, as well as its consequences for selected groups of the population.

The transition process from a centralised to a market economy in Poland has been accompanied by an unprecedented increase in poverty and a deepening of inequality across households - not only in terms of income but also in terms of socio-economic status. Although a small number of studies describing the economic situation of the poor in Poland have been undertaken, our understanding of the mechanisms that make poverty persist in the household context is considerably limited. The interaction of a number of factors may for example, result in individuals being trapped in a vicious circle of poverty. Low household income may lead to social exclusion and family distress, which is likely to have far-reaching consequences for all household members. Social exclusion may contribute to foster alcoholism, impede the human capital investment in children, and thus jeopardise the socioeconomic situation of the next generation. Socially excluded people experience severe difficulties in finding re-employment. Social transfers might even worsen the situation by providing a disincentive to seek work.

We need to understand the causes underlying the developments in social and economic hardship of Polish families during the course of the transition process. The introductory chapter therefore offers a general look at the picture of poverty in Poland; trends and new research results are described. In order to improve our understanding of the causes of social exclusion and to contribute to filling the gap in research we do not, however, restrict our attention solely to the analysis of the extent and nature of poverty in general but rather focus our analysis on issues that have been somewhat overlooked. This project contributes to the literature by investigating empirically different dimensions of the poverty debate in Poland - ranging from social exclusion through the relationship between transfers and labour supply to the transmission of poverty across generations. The empirical analyses are carried out on the basis of individual and household histories which are observed in the Polish Labour Force Survey and of administrative data on social assistance beneficiaries.

alcohol abuse, education, labour supply, poverty, social exclusion, social transfers, unemployment